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1 Market overview

1.1 Definition and scope of study

Non fungible tokens (NFTs) are cryptographic and virtual elements on the blockchain with unique identification codes and metadata (author, signature, date, type...) that distinguish them from one another.

NFTs as we know them have been around since around 2014, but became globally known from 2016 and 2017 thanks to the first art collections using this technology: Rare Pepes, CryptoPunks and CryptoKitties.

A non-fungible good is a non-interchangeable good, meaning that it is unique and cannot be mistaken for another good. A commodity such as rice or a cryptocurrency such as Bitcoin are examples of fungible goods: they can be replaced by similar goods without the need to differentiate between them.this non-fungible cryptographic token is stored on a blockchain (usually Ethereum) to become the certificate of authenticity for a digital file attached to it. The digital file itself is fungible: an image, video or sound can be copied and duplicated, but not the cryptographic token that serves as its certificate.

Today, we tend to attach NFTs to the digital files they certify, and this is quite normal, but technically speaking, an NFT remains an original use of a smart contract: a token stored on the blockchain.the blockchain's operation enables it tocertify the validity of all transactions within it, and therefore the validity of a non-fungible token stored on it. It's also very easy to browse the blockchain to observe transactions, enabling anyone to verify the origin and complete history of an NFT.to greatly simplify matters, an NFT is a certificate of authenticity, immutably stored on the blockchain, making it more effective than a paper certificate of authenticity .

The explosion of the NFT market has affected the art market in particular. For example, the NFT of the digital work "Everydays: the First 5,000 Days", signed by American crypto-artist Beeple, sold for almost $69.3 million at auction, an unprecedented record.

Today, the global NFT market is estimated at over $41 billion. In France, the market is booming, as evidenced by the growing popularity of Sorare. The startup enables users to acquire and exchange soccer player trading cards in the form of NFTs. At the start of 2022, the startup was valued at over $5 billion, making it one of the major unicorns in the French ecosystem.

1.2 The global NFT market

Market size and market capitalization

Estimates of the size of the NFT market vary depending on what is taken into account. Transactions that take place "off-chain" (***), such as NFT art sales at auction houses, are often not included in the data.

At the end of ****, the magazine 'Les Numériques', tells ...

1.3 Covid 19, Bitcoin collapse and Ukraine

Covid-**

being totally dematerialized, NFTs didn't particularly suffer from the Covid-** crisis; on the contrary,they even managed to make the most of it by attracting new artists and new creations. Indeed, while the health crisis has had painful effects on many sectors, such as the business of the famous Japanese ...

2 Demand analysis

2.1 Determinants of demand for NFT

NFT investors as a percentage of the population, by age and gender United States, ****, in Source: ****

NFTs have definitely entered the public consciousness. In a recent study conducted by The Harris Poll on behalf of Adweek, **% of Americans claim to be familiar with NFTs by the end of ****, compared with **% at ...

2.2 Demand by geographic and periodical breakdown

The graphs below represent the proportion of searches for a given term in a given region during a given period, relative to the time when it was most searched for (***).a higher value means that the proportion of that keyword's use in relation to the total number of search queries is ...

2.3 Demand spread across all population categories

Survey responses: "How likely are you to buy NFTs", by income type United States, ****, in Source: ****

The graph above shows that NFT purchases exist within all income categories, although they may evolve differently depending on the category. Indeed, it turns out that **% of people with an income of less than $**,***/year ...

2.4 Video games and play to earn: heralding new uses?

It's important to note that, while NFTs are often described as images or videos, these are merely uses. NFTs are therefore a technology, with as many possible applications and uses as we can imagine. The use of NFT simply creates scarcity and private property in a digital world. Today, NFTs linked ...

2.5 Market volatility over 2 years: an invitation to take a step back

Galaxy Digital's Head of Firmwide Research, Alex Thorn, said that since September ****, NFT sales trading volumes had been falling a little further each day, and were well away from the record level reached at the end of August **** : After September **, NFT transactions didn't even reach $*** million a day, whereas they had ...

3 Market structure

3.1 How do I sell an NFT?

To sell an item like NFT, you need to go through an online platform that connects sellers and potential buyers. The process is as follows:

In general, you have to start by paying the platform to "mint" (***) an NFT. On most platforms, this sum is denominated in Ether, the native cryptocurrency ...

3.2 A technology based on blockchain

To ensure that NFT files are tamper-proof, we use the blockchain. The blockchain relies on a decentralized system to ensure the transmission of data, keeping track of all operations carried out in a dated manner. Today, there are several types of blockchain, including :

Proof of Work (***) Proof of Stake (***) Practical Byzantine ...

3.3 The environmental impact of NFT

An objectively harmful impact:

As NFT transactions are essentially based on the Ethereum blockchain, it seems relevant to take into account the evolution of the number of transactions on this platform to realize the reality of market volume.

Number of Ethereum transactions per day World, ****-****, thousands of transactions Source: ****

We're ...

3.4 A still very risky market

While many investors turned to NFTs because they thought it was a simple opportunity to make a quick profit, this is far from the truth. According to Chainalysis, only **.*% of NFTs bought during the minting process and then resold on the platform generated a profit. The success rate on the secondary ...

3.5 The new ETHEREUM protocol in 2022

From September **, the Ethereum platform will be undergoing a major transition. Dubbed "the Merge", and repeatedly postponed due to technical difficulties, it involves switching the platform and its associated cryptocurrencyfrom a proof-of-work protocol to one based on proof-of-stake.[***]

With bitcoin, the production of blocks integrating transactions is carried out by 'miners' ...

4 Offer analysis

4.1 Where to buy NFT?

NFTs are goods that can be bought, sold, exchanged and created online or on specific marketplaces. Generally speaking, the creator or owner chooses a specific price. NFTs are also traded at auctions. Here are some examples of marketplaces where NFTs are traded.

Foundationis a community-created marketplace based on a sponsorship system: ...

4.2 NFT's offering in 2022 and results (2nd quarter 2022)

Breakdown of sales by segment

Number of NFT sales by segment, *nd quarter **** World, ****, number of sales Source: ****

Volume of dollars traded

Breakdown of NFT offering value in ****, by segment World, ****, % (***) Source: ****

4.3 Link between primary and secondary markets

As the NFT market is fairly recent, it cannot yet be considered a mature market and, as such, is highly speculative. As we saw in *.*, **% of **-** year-old buyers and **% of **-** year -old buyers are investors in the original sense of the term : they buy in the hope of realizing ...

4.4 Focus on the art market

This sub-segment of the art market is perhaps the best known, or at least the one that most often makes the headlines when it comes to NFTs. NFTs are helping to boost art market sales, especially for contemporary art. Coupled with the consequences of the current health crisis, the NFT boom ...

5 Regulations

5.1 NFT regulations in France

Current regulations in France

At present, there is still no legal framework for NFTs, which varies according to the rights assigned to them by the issuer.

However, there is a certain segmentation depending on the type of NFT used or sold:

When it comes to acquiring rights that are enforceable against ...

6 Positioning the players

6.1 Segmentation

  • OpenSea
  • Axie Infinity
  • Sorare
  • CryptoPunks - Larva Labs
  • Dapper Labs - NBA Top Shot
  • Rarible
  • Foundation
  • Nifty Gateway
  • SuperRare
  • Ethereum
  • Bitcoin
  • Binance
  • Coinbase
  • Arianee
  • Kinetix

List of charts presented in this market study

  • Breakdown of the NFT market, by segment type and trading volume
  • 2021 retrospective of NFT market value, by quarter
  • Market capitalization of the NFT market between 2019 and 2021
  • Growth in the number of NFT buyers and sellers worldwide
  • Change in trading volume and number of active portfolios between April and June 2022
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Latest news

games: mini-revolution at Sorare, which will accept euro payments - 01/08/2023
  • Sorare is offering a new feature that lets you pay in traditional currencies such as euros, dollars and pounds sterling.
  • This feature is the result of an association with fintech Mangopay.
  • Users can still opt to pay in cryptocurrency, specifically ether in the case of Sorare.
  • Sorare was founded in 2018.
  • Sorare currently has around 5 million users.
Sorare déploie une nouvelle offre pour convaincre le régulateur des jeux d'argent - 30/05/2023
Tiger Global invests in Arianee, one of France's pioneers in the Internet of Things. - 10/05/2022
  • Start-up Arianee, which helps brands create, distribute and exploit NFTs, closes €20 million equity and token financing round
  • Arianee's founders are : Frédéric Montagnon, Julien Romanetto, Emmanuelle Collet
  • Arianee works with Le Printemps, the Casino group and Breitling
  • Thanks to its fund-raising and the NFT craze, the start-up hopes to launch an office in New York
  • Arianee debuted in the luxury world in 2017 by authenticating and tracking a product via an NFT
  • The start-up has created a Web3 customer relations platform
Kinetix: a platform for creating 3D characters for the virtual world. - 04/05/2022
  • paris-based start-up raises $11 million
  • Founded in 2020 by : Yassine Tahi, Henri Mirande and Philip Belhassen
  • No-code platform enabling individuals to transform 2D videos into 3D animations
  • Kinetix's goal: launch its marketplace to create NFTs from their 3D avatars
  • Platform available on Roblox, but also TikTok and YouTube for artists, professional dancers, video game developers, animators, etc.
Sorare officiates a historic lift and becomes the most expensive French start-up in the sector. - 21/09/2021
  • Fantasy soccer and NFT game now valued at $4.3 billion
  • This makes Sorare the most highly valued unicorn in France
  • The platform boasts over 180,000 users
  • Sorare raises a historic half-billion euros ($680 million)
  • Players on the Sorare platform acquire cards bearing the likenesses of soccer players, available in limited quantities, to form a team of five players
  • This mega-deal takes Sorare into the unicorn club, and through the front door
  • The startup hopes to take advantage of this financial operation to enrich the experience offered to players in its fantasy soccer epic, starting with the development of a mobile application
  • The company aims to recruit around 150 people over the coming months, and has hired Lyft's HR manager

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

OpenSea
Axie Infinity
Sorare
CryptoPunks - Larva Labs
Dapper Labs - NBA Top Shot
Rarible
Foundation
Nifty Gateway
SuperRare
Ethereum
Bitcoin
Binance

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the NFT market | Overall

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